Tips for E-commerce Startups
The average Internet user spends 46 seconds on a webpage (Source: Clickz.com). This is why it is important for businesses to make use of this little time to grasp the attention of customers, make a compelling proposition which customers can’t refuse, and close the deal.
Competition in the virtual world grows with each passing day. Verisign reported 16% growth in domain name registrations in 2003. Netcraft, an Internet monitoring company that has tracked Web growth since 1995, reported in October 2006 that the total number of websites reached 100 million with .com consuming the largest share. There were 18,000 Web sites in August of 1995.
So what can online startups do to distinguish themselves from and rise above the competition? Here are 5 tips to help the budding entrepreneur.
1. Planning
This is the first and probably the most important step in any startups - be it online or offline. It is essential to have complete knowledge of what you’re going to do, budgeting, the break-even duration, strategic layout and milestones that are to be achieved.
A strategic layout is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. Various business analysis techniques can be used in strategic planning, including SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) and PEST analysis (Political, Economic, Social, and Technological analysis) or STEER analysis involving Socio-cultural, Technological, Economic, Ecological, and Regulatory factors.
In other words, it is a plan that does not go into technical details of the actual project implementation but is an attempt to analyze the feasibility of the business.
It will be apt enough to have several drafts of the plan in proper documentation. This will allow you to consider and reference the various options available and make changes as you deem fit.
Expect the unexpected: It is a good practice to always consider possibilities and issues that may arise. That said, interruptions can still happen; but provision for tricky situations will probably help you to better cope and deal with disruptions.
The Internet business has a cruel history of bringing about disastrous changes at phenomenal speed. Be prepared to face such upheavals and have plans in place to manage such turbulent times.
A concrete plan will give you a clearer understanding of how things should be started and when to move on to the phase.
2. Website Technology
Creating a website is easy. Almost everyone has access to tools that make authoring HTML pages easy. Dynamic web-programming is perhaps a little tougher, but with tutorials on w3schools.com, most people can start doing up their own websites within days or even hours.
Building a good website may not be rocket science; it certainly is no small feat either. While many may think that using fancy graphics and functions will attract prospective customers, this is rarely the case.
Most consumers prefer a clean and simple to use interface. Not all website visitors have the necessary plug-ins and technical know-how to install and/or to configure their systems so as to view the website correctly.
In other words, all your efforts in programming and designing the website would have gone to waste if visitors are turned off, rather than impressed by the complexity of the website.
Earlier, we mentioned that the average website visitor spends 46 seconds on a website.
Most visitors do not explore the website thoroughly; instead, they only browse the homepage or the page that they are led to from search engines (deep-linking). There should be consistency in the design and placement of buttons on every page.
While broadband is widely available today, we must not ignore users with typical 56 Kbps connection and a relatively small computer screen.
- Speed – Make sure the access to your website is fast and smooth.
- Make sure that your website navigation is in a consistent location on each page of your site. This will bring about the ease of use each time the visitor returns.
- Web sites with over 10 pages should probably contain a site map. This benefits both visitors and search engines trying to “crawl” your site.
- Use graphics sparingly to convey information.
- Visitors hate to scroll, especially horizontally; therefore the information should be kept adequately concise.
- Make it uncluttered, easy to navigate and easy to read.
- Use new technology wisely and effectively, not to complicate matters.
Remember, the aim is to reach out to potential customers.
3. Marketing
There are many definitions for marketing. Perhaps it can be loosely defined as the process of the exchange of goods/services/value between individuals/groups.
Marketing is the social process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others
Kotler.
S.H. Simmons, author and humorist, relates this anecdote.
"If a young man tells his date she's intelligent, looks lovely, and is a great conversationalist, he's saying the right things to the right person and that's marketing. If the young man tells his date how handsome, smart and successful he is -- that's advertising. If someone else tells the young woman how handsome, smart and successful her date is -- that's public relations."
The more recent marketing techniques are focused on satisfying customers’ needs. This is what we call “customer centrism”. There are many ways (offline and online) to bring about awareness to your website.
Increase your Web Presence:
Make your presence felt by carrying out intelligent marketing over the Internet. Perform search engine optimization (SEO) for your site, since the majority of buyers visit websites after spotting them come in the first few pages of search engine results. You can hire professional services or carry out Internet marketing by yourself if you are IT-competent. This may include buying links from prominent search engines like Yahoo and Google.
Associate yourself with web sites providing complimentary products or services on the Internet. This will help in increasing your web presence both for search engines and for prospective customers. You can also exchange links with these websites. Business owners should think about using offline marketing techniques in conjunction with online marketing. However, in this article, we shall focus more on the online aspects of marketing.
There are many ‘P’s in marketing (and we wonder why). While we’re talking about e-commerce, let us briefly examine these factors and the role they play in web marketing.
Product: Probably the most important ‘P’ of them all. You need a good product that can distinguish your online shop from competitors.
Products and services that are not advisable to be sold in general are:
- Commodities (low profit margin),
- Regulated/illegal items (drugs, weapons, alcohol)
- Food/Beverages (perishables and will likely need to undergo stringent testing before they are allowed to be sold)
- Hard to ship items (bulky, heavy) as shipping may not be cost-effective for both consumer and you.
Promotion: This includes advertising, sales promotion, publicity, and personal selling, branding and refers to the various methods of promoting the product/services, brand, or company.
You can raise awareness for your new website/product/services by
Offline methods can be used together with online methods.
Pricing: Consumers choose to look for items online for a very simple reason: Ease. While it may seem like a reasonable trade-off to command a higher premium for the relative ease in purchasing, this is often not the case. Those who shop online are IT-savvy and they can also be very price sensitive. These consumers search various websites and do online research (by visiting forums etc) before deciding on their purchase. With more websites dedicated to helping consumers compare products (prices, features and everything else), price slashing by e-tailers is hardly uncommon. Pricing your products substantially higher could hurt your sales volume!
Placement: Placement is as important on an e-shop as in a brick and mortar setting. The key is to properly label and categorize the items. You can consider to cross-sell items. For example, if you sell digital cameras, you can provide suggestions for dry cabinets, lenses, tripods and pouches. However, too many of such "point-of-purchases" during checkout can irritate your customers.
People: Many people think that, by having a well-organized website front that runs 24/7 ubiquitously negates the need for any human interaction. This is hardly the case. Machines can malfunction and there can always be problems with the sales and/or shipping process. Therefore it would be wise to leave contact details online for customers. This will probably give customers reassurance that the business is not a fly-by-night scam. Reputation is something that cannot be earned in a day or two.
Process: It would be good to document the sales process online. This will serve as a guide for customers who intend to purchase from the website. Business owners should carefully think about the process – how NOT TO complicate/duplicate the process. Think from the perspective as a would-be customer browsing a website and not from the point of view as the business owner. The sales process should be simple and secured.
Physical Evidence: The “physical” factor here may not be really tangible. What this means is that after the sales has gone through, most customers will expect to receive a confirmation reply/receipt via email (usually). A reputable shipping company that offers tracking for items would also allow customers to anticipate their parcel delivery. For intangible services, the above may not suffice.
It would therefore be good to provide testimonials, case studies and reviews from other sources like magazines, websites, and press releases to support your claims and boost customer’s confidence in buying from you.
4. Content
Why did we dedicate a section to “content” particularly? While it seems like a no-brainer to focus on the information aspect, many often overlook the importance of content delivery. Web content is the textual, visual or aural content that is encountered as part of the user experience on websites. It may include, among other things: text, images, sounds, videos and animations.
A lot of thought has to be put into the consolidation and organization of the information.
Different types of content cater to different consumers, as such, it is necessary to understand your customers’ needs. High-risk/involvement and highly priced products (digital cameras, mobile phones) and services require more professional reviews to be put up. Products such as mugs, caps and books often do not require an extensive review or guide.
Putting up comprehensive and organized articles may only serve as guide for potential customers, it may also be necessary to link to other reputable websites (remember to seek the webmaster’s approval!). This practice is known as back-linking.
Information quality is important. Quality – The quality of information is important. This includes the authenticity of your product claims. Sometimes it may even be necessary to seek endorsement or certifications from professionals/government bodies and authorities for certain products (for example, medical aids). The quality of the language used is equally important.
A simple yet well written description will win favor with customers.
Content displayed on websites should be:
1). Accurate – Information should always be portrayed accurately. Trust is built over time. If you are want to project a good image to current/prospective so that they feel safe buying from you, do not place any misleading messages!
2). Timely – All information displayed should be up to date. It is also a good practice to show the date of the article/information. This may not prevent misunderstandings but it will certainly help when any disputes arise.
3). Complete – Terms, conditions and if possible, the sales and shipping process should be made known to customers. Details on products and services should be complete.
4). Understandable – Communicating an idea across effectively is the crux to selling products/services online. When your customers fail to understand your point, it is unlikely they will buy from your online store.
Website owners are responsible for the information displayed. Changes, if any, should be reflected immediately. Terms, conditions and clauses should be highlighted to customers. An example can be found here
Many believe Web 2.0 to be the new trend. Consumers are invited to give reviews and feedback on the seller. This encourages active collaboration and interaction between consumers and the business owner. User generated content can be both a boon and bane – you should discuss the administrative controls and possibilities with your web developer.
5. Implementation and integration
The reliability of your products and services is equally as important as the content displayed. Delivery and handling of goods and services should be efficient and reliable. Customers will never be likely to be willing to compromise on their purchases – this includes the warranty, the product quality and condition. First time customers are unlikely to trust you fully – which is why order fulfillment, products/services quality, process effectiveness and efficiency is your responsibility. Though as a general rule of thumb – “under-promise” and “over-deliver” will be a good practice for any business.
The integration between the offline and online aspects of your business should be seamless. If you are already running a brick/mortar (physical store) business, it may be necessary to plan and implement the entire project in phases so as not to disrupt the day-to-day running of the business.
Business owners should be fully aware of the technical capabilities of their website. If they are not IT-savvy, they should always approach their third-party web developer for advice before, during and after the implementation. It is important that the business processes be integrated with the IT aspects (of the website). Technology should be an enabler, not a hassle.
About the Author
I am the editor at www.WhySG.com , a newly startup site for Singaporean entrepreneurs to exchange views on business and technology.
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